How to Stop Double Brokerage

[Michael Ludwig]

Why does the Loadlink allow Carriers to post loads?

Because we have interlining freight. Perfectly legit from the carrier's standpoint.
(To be clear ... I don't even have a LoadLink account anymore ... whole other story)

Regarding your poll ... I'm the one vote Yes. The carrier is 100% to blame for no other reason than lack of due diligence.
If as a carrier you get a load from another carrier that does not have a brokerage arm, and the details are that you pick up or deliver to a carrier's dock, that is an interlined load.
If as a carrier you get a load from another carrier that does not have a brokerage arm, and the details are that you pick the freight at a shipper and deliver it to a receiver, then it is 100% a brokered load, and highly likely to be a double brokered load.
If as a carrier you decide to take that load that is highly likely to be double brokered, you should assume the risk of payment, or lack thereof as the case may be.
If, on the other hand, you get a load from a carrier that does have a brokerage arm, and your instructions are to bill that brokerage arm, then you have the full weight of the law behind you in collecting the charges due.
And ... Loaders is 1,000% correct ... There is no crying in baseball !!!!

 

[Jim L]

The issue wholly comes down to complacency. Our industry is complacent and usually puts the onus of the decision making to the price. Everyone in the chain is compliant to a degree. The Beneficial Freight Owner (BFO), Load Broker (LB), Booking Carrier (BC), actual carrier (AC), shipper and receiver. Please don't crucify me for this because I know there are exceptions.
Beneficial Freight Owner:
This person gets a lot of phone calls for service. He looks for the most cost effective solution so he gives out the load particulars to his ever growing email list and the rates come in. Usually the lowest cost provider will get the load and becomes the LB. He doesn't care how it gets done or if LB actually exists but get it done.
LB:
This guy tries to find the cheapest option and if that means setting up a new carrier then so be it. In today's environment, where loads are few and carriers are many, they post a load, take a dozen or so calls, figure out their best option and send over the rate confirmation to the BC.
BC:
This guy is usually a carrier and has the paperwork to prove it. If BC and AC are the same then this whole conversation is moot. In double broker cases, this guy has a staff member that convinces LB that they have the equipment to do it when in reality they do not. BC receives his rate confirmation and quickly posts this on boards to try and find someone else who can do it cheaper. They change some of the details so it is not apparent. Brampton becomes Mississauga, Detroit become Dearborn etc. Now they take the absolute cheapest option because they have no skin in the game.
AC;
This poor guy only sees the two points on the load board and is sometimes desperate because in this environment the driver may have been sitting a while and the pressure is on to get the driver someplace. He books the load and sends his driver to the location as the rate confirmation comes in. In desperation he takes the load from someone new and has no way to confirm if BC is supposed to be a party to the transaction. The driver arrives at the shipper and is promptly loaded; the shipper was waiting for a truck to arrive so this must be it. Had LB or the BFO told the shipper to expect carrier XYZ and confirm when the truck arrives then it could have stopped this in its track but neither the BFO, LB or the shipper make the time. AC calls BC and says that he is loaded and nobody is none the wiser. Let's leave PARS, documents and carrier name out of this at this point because it just muddies the original point which is complacency.
AC then delivers the load without issue because the receiver is expecting the goods and everyone at this point seems to be happy.
LB:
LB should follow up with receiver to ensure that goods were received in good order and to confirm the delivery carrier. Maybe at this point ask for a copy of the BOL. This is probably the most important as any problems such as damage, shortage, missed appointment times and even the wrong carrier can be dealt with. AC bills BC, BC bills LB. Now the LB can confirm if the paperwork matches - maybe different bills are used and different signatures which is a tell tale sign.



Your question was how to fix it. Remember, nobody complains unless someone doesn't get paid quick enough or not at all.
1. This is the easiest so I'll put it first. BFO or LB needs to call the shipper to put on the the BOL the LB name as 3rd party billing. If that is not possible then a separate sheet on company letterhead that says if there are any issues with the movement of this freight who should be called. Very quickly the AC will see who is responsible. If this is done for every shipment the end will be in sight.
2. LB should request shipper to confirm the carrier and enforce the driver who signed for it put the carriers name on the BOL and send it with the other paperwork to the LB.
3. AC should do a better job of sourcing their brokers and checking the credit information. They should never accept to run under someone else's PARS. If there is anything out of place, ask for payment before delivery.
4. Loadlink could definitely enforce that you must have a broker authority to post a load but will not stop a BC working with a different LB to post the load(sister companies).
5. LB should not offer quick pay. BC's try to get their funds ASAP because the longer it is out, the greater the chance of it being caught.

In the end, a good LB/AC relationship stops a lot of headaches. When you have to make a new relationship you take a chance but due diligence should be taken. Unfortunately operations are all too busy and too rushed to do this and their only goal is to get freight moving or trucks moving. We are all too complacent at times.

 

[Michael Ludwig]

When you have to make a new relationship you take a chance but due diligence should be taken.

So what you are saying is that a 10 dollar hooker is okay as long as you turn the lights on first ... LOL

 

[loaders]

From a load brokers perspective, taking on a new carrier is one of the most risky activities you can engage in. I am sorry to all those new or newer carriers out there looking for work, and I realize that I could be missing out on some great service and good, long term relationships but there are just so, so many crooks floating around, we really try to avoid it like the plague. The real bad ones have figured out how to provide false addresses, fake references, fraudulent insurance coverage and made up registrations, to say nothing of the assurances and promises about the work they can do. It seems that with every new procedure we put in place, the rats find a way around it. When we do match up with a new carrier, we try to start the dance slowly, a bit of LTL, or a short haul TL, just to limit our exposure and test drive their service if you will. In todays market, there is no such thing as being too careful. And the same cautions should apply to carriers doing business with a new or unknown freight broker.

 

[frtbrkr]

Because we have interlining freight. Perfectly legit from the carrier's standpoint.
(To be clear ... I don't even have a LoadLink account anymore ... whole other story)

Regarding your poll ... I'm the one vote Yes. The carrier is 100% to blame for no other reason than lack of due diligence.
If as a carrier you get a load from another carrier that does not have a brokerage arm, and the details are that you pick up or deliver to a carrier's dock, that is an interlined load.
If as a carrier you get a load from another carrier that does not have a brokerage arm, and the details are that you pick the freight at a shipper and deliver it to a receiver, then it is 100% a brokered load, and highly likely to be a double brokered load.
If as a carrier you decide to take that load that is highly likely to be double brokered, you should assume the risk of payment, or lack thereof as the case may be.
If, on the other hand, you get a load from a carrier that does have a brokerage arm, and your instructions are to bill that brokerage arm, then you have the full weight of the law behind you in collecting the charges due.
And ... Loaders is 1,000% correct ... There is no crying in baseball !!!!

Hi @Michael Ludwig

Because we have interlining freight. Perfectly legit from the carrier's standpoint.
(To be clear ... I don't even have a LoadLink account anymore ... whole other story)

Regarding your poll ... I'm the one vote Yes. The carrier is 100% to blame for no other reason than lack of due diligence.
If as a carrier you get a load from another carrier that does not have a brokerage arm, and the details are that you pick up or deliver to a carrier's dock, that is an interlined load.
If as a carrier you get a load from another carrier that does not have a brokerage arm, and the details are that you pick the freight at a shipper and deliver it to a receiver, then it is 100% a brokered load, and highly likely to be a double brokered load.
If as a carrier you decide to take that load that is highly likely to be double brokered, you should assume the risk of payment, or lack thereof as the case may be.
If, on the other hand, you get a load from a carrier that does have a brokerage arm, and your instructions are to bill that brokerage arm, then you have the full weight of the law behind you in collecting the charges due.
And ... Loaders is 1,000% correct ... There is no crying in baseball !!!!

Hi Micheal, nice to hear from you.

Would you please explain me what is an interline carrier on a FTL? Why is it legit when our customers freight is being unloaded at a crossdock for another carrier to pick it up only to cross dock it again and have a another carrier deliver it? Loads on a FTL are meant to be loaded and delivered in the same trailer unless approved by the shipper. I would like to hear more about interlineing.

When a carrier takes freight from a Carriers Brokerage arm, its perfectly legit. I do however expect the Brokerage arm to have complete BROKER DOT and provincial authorities as well as a separate dedicated account on the Link. You want be a LB, be one and act like one. It goes without saying that should only use their Broker arm if their customer is aware they are brokering it out. Regardless if they got the load from a shipper direct or from a LB, they need to be honest and know what to expect.

Imagine if you are a Morgatge Broker and you find out that the Banks you are dealing with are not only selling direct to customers but they are also acting as a Mortgage Broker, would you accept it?

Imagine if a real estate broker is finding out that the owner of the house is not only selling direct, but they are also liscesed as a Real Easter agent and competing with you, would you accept it?

Imaging if an insurance broker is finding out that the insurance carrier they are dealing with is not only selling direct but they are also acting as an insurance broker, would you accept it?

Show me one industry were the Broker not only has million competitions, not only is it so easy for the customer to go directly to the carrier, but the carriers themselves are acting as Brokers and competing.... This is mind boggling.

We welcome competition, but on an even playing field.

Allowing carriers to post loads is one of the main ways for DB to thrive, it MUST be stopped.

 

[tasuinam]

Apparently a 'friend' told me to broker freight - "all you need is the cargo insurance - which as a I carrier I have alreday and permission from the shipper that I can broker the loads" ... can't be that simple right?

Also eventhough I am a carrier - for some reason I can post laods on the link ... comes with the package .. not sure how ... we called and asked and they said you have the insurance... Link does not care

 

[loaders]

Of course Link doesn’t care. They aren’t the designated gatekeepers charged with keeping the foxes out of the henhouse. Your “friend” left out some rather important details regarding brokering freight. By definition, freight brokering is the arrangement of transportation between a shipper and a carrier where the party arranging the freight, makes a commission from that transaction. Regardless of where the freight broker is domiciled, when the shipment is destined for, or originating from the US (crossing a state or international border) the broker must be registered with the FMCSA, which includes holding a75K surety bond. In Ontario, a load broker is required to maintain a separate “trust” account through which the payments from their customers and the corresponding payments to the carriers flows. For a broker to maintain a cargo, or contingency cargo policy is a very worthwhile idea, it is not mandatory. As the broker never takes possession of the shipment and it is never in their care or control, the cargo insurance requirement rests solely on the part of the carrier performing the transport. These regulations apply equally to stand alone brokerages, brokerage arms of carriers and stand alone carriers wanting to move their “excess” freight. Perhaps it is the proliferation of this type of inaccurate information that has resulted in so many people thinking they can broker freight, carriers included. In spite of these regulations and conditions, there is nothing stopping someone from hanging out a freight brokerage sign as enforcement of any of these provisions is virtually non existent. In my humble opinion, being completely legal and entirely registered and insured is the best sales tool I have when discussing with a customer why my service is better than an unlicensed, uninsured competitor. Plus it demonstrates to my carrier suppliers that we are serious and professional about our business.

 

[tasuinam]

Of course Link doesn’t care. They aren’t the designated gatekeepers charged with keeping the foxes out of the henhouse. Your “friend” left out some rather important details regarding brokering freight. By definition, freight brokering is the arrangement of transportation between a shipper and a carrier where the party arranging the freight, makes a commission from that transaction. Regardless of where the freight broker is domiciled, when the shipment is destined for, or originating from the US (crossing a state or international border) the broker must be registered with the FMCSA, which includes holding a75K surety bond. In Ontario, a load broker is required to maintain a separate “trust” account through which the payments from their customers and the corresponding payments to the carriers flows. For a broker to maintain a cargo, or contingency cargo policy is a very worthwhile idea, it is not mandatory. As the broker never takes possession of the shipment and it is never in their care or control, the cargo insurance requirement rests solely on the part of the carrier performing the transport. These regulations apply equally to stand alone brokerages, brokerage arms of carriers and stand alone carriers wanting to move their “excess” freight. Perhaps it is the proliferation of this type of inaccurate information that has resulted in so many people thinking they can broker freight, carriers included. In spite of these regulations and conditions, there is nothing stopping someone from hanging out a freight brokerage sign as enforcement of any of these provisions is virtually non existent. In my humble opinion, being completely legal and entirely registered and insured is the best sales tool I have when discussing with a customer why my service is better than an unlicensed, uninsured competitor. Plus it demonstrates to my carrier suppliers that we are serious and professional about our business.

I agree ... the misinformation is rampant - and it's insurance brokers giving it out ... so people think it is legit. My rule of thimb ' if is sounds too goo dto be true - it generally is'

 

[loaders]

Again, it is entirely a business decision on your part. Follow the established rules…..or don’t. Take the long road filling out forms, applying for registrations, arranging surety bonds and ”trust” accounts, or take the short cut of ignoring it all. Both the TIA in the US and the NTBA here in Canada are great resources of current and accurate information pertaining to freight brokering. It has been my experience that there are very few insurance companies, and even fewer insurance brokers who have a working knowledge of the freight brokerage industry. If you are indeed serious about expanding your business into the brokerage side, it would serve you well to consult with an experienced insurance broker, there are a few around, some on this site.

 

[frtbrkr]

Apparently a 'friend' told me to broker freight - "all you need is the cargo insurance - which as a I carrier I have alreday and permission from the shipper that I can broker the loads" ... can't be that simple right?

Also eventhough I am a carrier - for some reason I can post laods on the link ... comes with the package .. not sure how ... we called and asked and they said you have the insurance... Link does not care

And that's my point. The link wouldn't allow for a Broker to post Equipment unless they have at least one Truck, but they allow for a Carrier to act as Broker with no Broker authority.

Not sure why Carriers would want this to continue since they so hate DB's.

Or do they?

 

[frtbrkr]

Of course Link doesn’t care. They aren’t the designated gatekeepers charged with keeping the foxes out of the henhouse. Your “friend” left out some rather important details regarding brokering freight. By definition, freight brokering is the arrangement of transportation between a shipper and a carrier where the party arranging the freight, makes a commission from that transaction. Regardless of where the freight broker is domiciled, when the shipment is destined for, or originating from the US (crossing a state or international border) the broker must be registered with the FMCSA, which includes holding a75K surety bond. In Ontario, a load broker is required to maintain a separate “trust” account through which the payments from their customers and the corresponding payments to the carriers flows. For a broker to maintain a cargo, or contingency cargo policy is a very worthwhile idea, it is not mandatory. As the broker never takes possession of the shipment and it is never in their care or control, the cargo insurance requirement rests solely on the part of the carrier performing the transport. These regulations apply equally to stand alone brokerages, brokerage arms of carriers and stand alone carriers wanting to move their “excess” freight. Perhaps it is the proliferation of this type of inaccurate information that has resulted in so many people thinking they can broker freight, carriers included. In spite of these regulations and conditions, there is nothing stopping someone from hanging out a freight brokerage sign as enforcement of any of these provisions is virtually non existent. In my humble opinion, being completely legal and entirely registered and insured is the best sales tool I have when discussing with a customer why my service is better than an unlicensed, uninsured competitor. Plus it demonstrates to my carrier suppliers that we are serious and professional about our business.

wow, wow, wow. Love it.

Loadlink isn't the gatekeeper but there are here to help the industry and will usually adopt to the requests from the general good Carriers and Brokers.

If they have multiple requests from the larger reputable carriers and stakeholders to eliminate Load Posting for Carriers, they will do it.

But here is where the trouble lies, the carriers do want DB to continue when it's there benefit and then camouflage behind the law when it's not working in their favor.

Which is brings us back to my "empathy" fiasco

 

[martinwizz]

Hi Carriers

I use to have a let of empathy for carriers who didn't got paid by the "Double Brokers". At the end of the day, it's their truck, their driver, their fuel and insurance which hauled the freight, they deserved to get paid.

I recently - however - lost that empathy, i would like to ask carriers to help me get it back.

It's my understanding, that the carriers know when they P/U the freight, that it's given to them by another carrier, they know their customer isn't honest to the shipper/receiver or to the real "load broker". The temptation for money leads them to look sideways and enable the "Double Broker" to continue with their shady business model.

In most cases, the carrier which hauls the freight knows that something isn't right. Most of the times, the "Double Broker" is telling them the Driver needs to ID himself as [Name of the Double Broker company], no real broker will ever ask for it, quite the opposite, most real honest Load Brokers will notify the shipper in advance as to which Carrier was hired for P/U. In others cases, the Double Broker will be the one issuing the PARS/PAPS # to avoid getting caught. There are other ways where the hauling carrier knows or senses that something is not straight, but chooses to look away. Once they are on the receiving-end of these crooks, it's then they are crying for help from the shipper/receiver or the real honest Load Broker.

You cant have the cake and eat it too, you are either operating with principal, value and honor or you don't!

Carriers, please help me change my view on this.

I can add to this that it is also their duty not to take a load and give credit to anyone out there. Running a business like some carriers are, spending lots of dollars upfront to the benefits of shady companies. Maybe they rely now too much on that law that requires the consignee to repay the bills and they overcome that very important aspect of any business: knowing who you deal with. Loadboards have aggravated this over the years and digitalization of the freight even more. At the end of the day, there is still due diligence required. And you are right, as a carriers, they should be now well aware of the signs pointing out to the fact that the load they have accepted is issued in a double broker scenario.

 

[tasuinam]

And that's my point. The link wouldn't allow for a Broker to post Equipment unless they have at least one Truck, but they allow for a Carrier to act as Broker with no Broker authority.

Not sure why Carriers would want this to continue since they so hate DB's.

Or do they?

like I said we called in and asked why this was available - and that we don;t need it .. answer was 'part of the package'.... so what do you say to that ..
like if you have shaw/ MTS you get an email for free - we never use it but cannot get rid of it either

 

[LrgCar]

wow, wow, wow. Love it.

Loadlink isn't the gatekeeper but there are here to help the industry and will usually adopt to the requests from the general good Carriers and Brokers.

If they have multiple requests from the larger reputable carriers and stakeholders to eliminate Load Posting for Carriers, they will do it.

But here is where the trouble lies, the carriers do want DB to continue when it's there benefit and then camouflage behind the law when it's not working in the favor.

Which is brings us back to my "empathy" fiasco

They dont care, if you pay their invoices they will let you do anything for the most part, unfortunately. Also, what's wrong with carriers posting loads? Many have their own customers and dont just rely on brokers duhhh. Also, provinces like BC/AB dont have any licensing or surety requirements for freight brokering if it's not moving cross border. Even your basic carriers are more insured than most of these so-called freight brokers and forwarders.

 

[Michael Ludwig]

Would you please explain me what is an interline carrier on a FTL?

Works the same as LTL. i.e. My customer has a load to go to Cali. I don't service Cali, but Rob does. I pick up the load and take it to Rob's dock where he takes it off my trailer, puts it on his, and issues a BOL denoting the same.

Don't even mention Real estate brokers. If you firmly believe a Load Broker is on the same level as a Real Estate broker, my estimation of you will have gone down considerably. There is no more dishonest profession than a Real Estate broker.

A level playing field? Load brokerage is, for all intents and purposes, unregulated. There is no such thing as a level playing field in an unregulated industry.

 

[frtbrkr]

Again, it is entirely a business decision on your part. Follow the established rules…..or don’t. Take the long road filling out forms, applying for registrations, arranging surety bonds and ”trust” accounts, or take the short cut of ignoring it all. Both the TIA in the US and the NTBA here in Canada are great resources of current and accurate information pertaining to freight brokering. It has been my experience that there are very few insurance companies, and even fewer insurance brokers who have a working knowledge of the freight brokerage industry. If you are indeed serious about expanding your business into the brokerage side, it would serve you well to consult with an experienced insurance broker, there are a few around, some on this site.

lol

i had a discussing with an Insurance Broker 4 years ago about Contingent Cargo he was trying to offer me, i gave him a lecture how it works and why it's worthless, he's still dizzy...

 

[frtbrkr]

They dont care, if you pay their invoices they will let you do anything for the most part, unfortunately. Also, what's wrong with carriers posting loads? Many have their own customers and dont just rely on brokers duhhh. Also, provinces like BC/AB dont have any licensing or surety requirements for freight brokering if it's not moving cross border. Even your basic carriers are more insured than most of these so-called freight brokers and forwarders.

You are right on all points.

But one think, if the Carrier really want to stop DB'ing, they can apply pressure for Loadlink the option for a Carrier to post loads. Maybe you and i are not big enough to do it but are larger carriers with a much heavier weight then you and me. In fact, the Link can make more money by forcing those carriers to open a new account for each, this could generate a ton of revenue for the link if people still willing to pay for both and for those who cant afford it at lease, you minimized their chance to DB it, LoadLink has nothing to loose only to gain. (Dear LoadLink, I'm not asking for royalties, I'll be glad if you do it....)

This is "the" main enabler for DB to continue.

Like i sad beofre:
- Banks/lenders do not have their own Brokerage arm to complete with MB's.
- Insurance Carriers do not have their own Brokerage arm to complete with IB's.
- CBP/CBSA do not have their own Brokerage arm to compete with CB's (well, it's not the same but you get the point)
- Real Estate investors do not have there own Brokerage arm to complete with REB's.

The list goes on and on.

If transport Carriers do want to have their own LB arm to complete with LB's, then they are literally aiding and embedding for DB and dishonesty to survive and thrive.

 

[frtbrkr]

Works the same as LTL. i.e. My customer has a load to go to Cali. I don't service Cali, but Rob does. I pick up the load and take it to Rob's dock where he takes it off my trailer, puts it on his, and issues a BOL denoting the same.

Don't even mention Real estate brokers. If you firmly believe a Load Broker is on the same level as a Real Estate broker, my estimation of you will have gone down considerably. There is no more dishonest profession than a Real Estate broker.

A level playing field? Load brokerage is, for all intents and purposes, unregulated. There is no such thing as a level playing field in an unregulated industry.

Thanks for explaining the interline idea.

And why do you think it's right fair and honest for you to assign my customers fright for someone else?

I know you and i trust you, but I'm not necessarily trusting the one you trust, unless you tell me in advance so i can review "their" authorities/insurance and decide.

Nothing personal @Michael Ludwig, it's just a discussion we are having about a general concept.

 

[Jim L]

I can add to this that it is also their duty not to take a load and give credit to anyone out there. Running a business like some carriers are, spending lots of dollars upfront to the benefits of shady companies. Maybe they rely now too much on that law that requires the consignee to repay the bills and they overcome that very important aspect of any business: knowing who you deal with. Loadboards have aggravated this over the years and digitalization of the freight even more. At the end of the day, there is still due diligence required. And you are right, as a carriers, they should be now well aware of the signs pointing out to the fact that the load they have accepted is issued in a double broker scenario.

Credit is another item that has grossly been abused in the past decades. Some brokers now expect it without question - in fact it is now expected that 45 days is the norm. I had one broker put on their rate confirmation sheet as 90 days (which turned out to be 120).
A true fix would be CBD - Cash Before Delivery.

 

[Jim L]

You are right on all points.

But one think, if the Carrier really want to stop DB'ing, they can apply pressure for Loadlink the option for a Carrier to post loads. Maybe you and i are not big enough to do it but are larger carriers with a much heavier weight then you and me. In fact, the Link can make more money by forcing those carriers to open a new account for each, this could generate a ton of revenue for the link if people still willing to pay for both and for those who cant afford it at lease, you minimized their chance to DB it, LoadLink has nothing to loose only to gain. (Dear LoadLink, I'm not asking for royalties, I'll be glad if you do it....)

This is "the" main enabler for DB to continue.

Good luck getting LoadLink to change. I am amazed LoadLink even looks into complaints.